It seems as if the Democrats in Washington are purposely trying to destroy Western civilization.  It is a bizarre thing to watch.

Almost everything that Biden does is destructive.  I don’t know what is in Biden’s head, if anything, but his handlers – the people calling the shots – are purposely trying to cause chaos and destruction.  I can’t fully explain it either.

I like to compare this time to when Bill Clinton was president.  I think Clinton is a criminal in many ways.  He was always in politics for the power and money and the personal pleasure it brought him.

But the corrupt and criminal things Clinton did were to generally further his own personal gain.  It was understandable in terms of incentives.  Clinton also wanted to be liked.  He was a smooth talker.

Therefore, even though he probably had socialist tendencies, he was really a politician above all.  This turned him into something of a populist.  He wasn’t purposely trying to destroy anything unless there was some kind of advantage that it gave him.

After two years of Clinton, we got a Republican-controlled Congress, and times were actually somewhat sane.  I don’t give Clinton a pass on the wars he started, but even those were minor in comparison to what was to come.  In terms of the federal budget, it was the closest thing we had seen to a balanced budget in a long time, and we haven’t come anywhere close since then.

Now we have to deal with the destroyers of civilization.  This can include rioting, purposely encouraging illegal immigration, reckless spending, surveillance, and vaccine mandates.  To be sure, I understand that not all of this is new, but it has been put on steroids.

I don’t vote that often.  When there is a House or Senate race, I don’t usually vote for either one.  I will only vote Republican if I think the person is outside of the Republican establishment.  I will vote for DeSantis for governor this November.

I don’t trust most Republicans at all.  With that said, I hope that the Democrats get absolutely trounced in November.  I would like to see the Republicans get a majority in the House by 50 or more seats.  For all of the destructive policies, particularly of the last two years, a strong message needs to be sent.

I have little faith in most Republicans, especially those in Washington DC.  But there are a few good ones, and it has gotten better over the last several years.

I would take a Marjorie Taylor Greene (MTG) over almost any Republican in Congress in the past, or even today.  Even on foreign policy, she is decent, and she is certainly outside the Republican establishment.

The big difference maker with someone like MTG is that she has courage.  She will stand up and say what needs to be said.  This is a quality that is often lacking in politicians.

The Power of Congress

I actually think that Congress cedes too much power.  Out of the three branches of government, Congress has become the weakest.  The executive branch (the presidency) is the worst and the most destructive.  The courts are generally bad and overstep their authority, but at least there are a lot of judges, so it isn’t all bad.

Congress is supposed to have more power to keep these other branches in check.  Instead, Congress has seemed to delegate a lot of its authorities, and most of that is unconstitutional.

All of these alphabet agencies under the executive branch shouldn’t be writing rules and regulations.  It is up to Congress to make the laws; not to delegate them out.

That’s how we get stuck with the administrative state.  That is how we get stuck with tyranny.

Imagine the power that the Republicans could exercise if they take control of Congress.  And when I say “power”, I mean the power to scale back everything that Biden and his destroyers have done.

Congress controls the power of the purse.  Funding is everything in Washington DC.

The FBI just raided Trump’s house, and it seems obvious it was purely political.  It is more intimidation and criminality coming out of the FBI.  They purposely have laws so that they can be enforced only against those who do not obey the establishment.  They can prosecute almost anybody for anything if they really want to.

I hear some Republicans calling for an investigation and even for reforming the FBI.  Let me tell you that there is no reforming the FBI, or the CIA, or the NSA.  They should all be defunded.  That should be the Republican position.

What above vaccine mandates?  Biden can’t enforce these without the alphabet agencies.  The Republicans can withhold all funding from the CDC, the FDA, and other agencies that are imposing these mandates.  That’s a quick way to get them repealed.

What about “green energy” and all of the horrible rules being imposed on car companies?  The executive branch is trying to shove electric vehicles down our collective throats.  How about we defund the EPA?

With every rule and regulation, there is some enforcement agency.  How about the Republicans take the major ones first?  By withholding funds or threatening to withhold funds from agencies, they can overturn Biden’s entire destructive agenda.

The problem is that you need Republicans who actually want to do this and are willing to take a stand.  I think the more radical (i.e., principled) Republicans in Congress need to make these suggestions and hopefully the citizenry will start pressuring bad Republicans.

Mitch McConnell isn’t going to do anything principled or right unless pressure is brought down on him to do so.  But we’ve seen some more establishment Republicans losing in their primaries, which is a good sign.  It is a signal that more will come if Republican politicians don’t start voting the way their constituents want them to vote.

This is where it is important to let your voice be heard.  Most people in Congress have no principles.  But if they hear from enough constituents on a particular issue, they can be swayed.  They will stick their finger in the political wind.  They will march with the parade.

The latest consumer price index (CPI) numbers were released for July 2022.  The CPI was flat for the month, while the year-over-year price inflation has gone down to 8.5%.  It was expected to come in at 8.7%.

The less volatile median CPI came in at 0.5% for July, while the year-over-year median CPI increased to 6.3% (previously 6%).

The 8.5% CPI is certainly an improvement from the 9.1% year-over-year number that was reported the previous month.  But now for the bad news.

First, overall consumer prices aren’t going down.  The rate of price inflation may be decelerating, but it’s not as if you are going to see prices again that resemble what you saw a year or two ago, especially when you look at food.  Perhaps some asset prices like real estate and stocks will see price deflation, but your grocery bill probably isn’t going to go down any time soon.

In fact, your grocery prices continue to go up.  That is the second piece of bad news with this report.  The primary reason the rate came in flat for July is because gas prices fell quite a bit.  This is good news if you drive a lot.  But notice that the decline in gas prices didn’t lead to a decline in the CPI.  It only offset the rising prices of things, especially food. Actually, the price inflation for food is going higher even more than it was previously.

Now we move on to the third piece of bad news, and this is the big one.  While we may have hit peak price inflation for now, this likely signals that we are in for a big recession.

The Federal Reserve was expected to hike its target rate by 75 basis points (0.75%) at its meeting in later September.  Now, with the slightly lower-than-expected CPI numbers, the odds have shifted.  A 50 basis point hike seems more likely now.

This is why the stock market roared higher on Wednesday.

But the Fed is still in the mode of hiking rates and very slowly reducing its balance sheet.  This is in the face of a bond market where we are already seeing a somewhat inverted yield curve.  The spread between the 2-year yield and 10-year yield has been quite significant, with the 2-year yield coming in higher at 40 basis points or more.

I expect we will see an inversion of the 10-year yield and 3-month yield soon.  You can also compare the 30-year to the 1-year and see that investors are willing to take a lower yield for a 30-year bond than for a 1-year Treasury.  This seems absurd unless you consider that a severe recession is on the horizon.

Gold and other precious metals have not done particularly well in the face of high inflation.  It seems to be the only asset class that isn’t in a bubble.  Contributing to this is the strong U.S. dollar.  The dollar is only strong in comparison to the other more horrible fiat currencies.

The bond market and the gold market are indicating that we should fear a recession more than future price inflation.  They are telling us that there is going to be a massive correction.

I am not talking about the possible recession from two straight quarters of negative GDP.  I know there is a debate about the definition of a recession and whether we have been in one in 2022.

If we are in a recession now (or just got out of one), it will be nothing compared to what is coming.  These are very hard times for middle class America because real wage rates are going down with the high price inflation.

However, unemployment is very low.  And despite a tough year so far for stocks, the market indexes are still way above where they were a couple of years ago.

If we are in a recession now, it is mild compared to what will be.  I am talking about a recession coming where unemployment jumps higher, major companies are filing for bankruptcy, and stocks are going down 50% or more.  Also, I am less certain on this, but it wouldn’t surprise me to see housing prices fall by 25% or more.

There will be another CPI report before the next Fed meeting.  In the meantime, I am watching the yield curve to see if we get a bigger inversion.  As of right now, I think a hard recession in 2023 is likely.

Alex Jones was recently ordered to pay in excess of $45 million in punitive damages over his assertions that the Sandy Hook shooting was a hoax.  This was on top of the $4.1 million he was ordered to pay for actual damages.

Aside from the fact that it involves Alex Jones, it is a somewhat bizarre case.  The judge issued a default judgment over Jones due to his supposedly willful noncompliance with the discovery process.

Perhaps part of this could be blamed on Jones’ attorneys, but it is rather odd that a defendant can just be found guilty like that.

Alex Jones and his company InfoWars are known for conspiracy theories, which sometimes means just questioning the official narrative put out by the establishment media.  It is important to point out that if you put Jones’ record up against Biden, Fauci, and the COVID hysterics in government, Jones has been far more accurate.

Oh wait.  Am I going to get into legal trouble for making such a claim?  Is this tarnishing the reputation of Biden and Fauci?  Is it putting them through personal pain?

If this Alex Jones case is any kind of precedent (and why shouldn’t it be?), then free speech in America is going to its graveyard.

Alex Jones was one of the first people to be banned by social media companies.  Most people didn’t care because they weren’t Alex Jones, and they weren’t fans of Alex Jones.  Once the social media companies had gained some acceptance for this censoring, it became easier to censor anyone who questions the official establishment narrative on COVID, Ukraine, or anything else.

I can tell you that the judgment against Jones is at least a hundred times worse than him getting censored by social media companies.  At least when the social media companies censor, it is just on their platforms.  They didn’t throw anyone in jail or bankrupt someone for posting anti-establishment narratives on Twitter or Facebook.

Why did parents of Sandy Hook children take this to the court system?  It was obviously for money.  Oh wait, I take that back, because I don’t want them to sue me.

If they were concerned about their reputation, why didn’t they go on Alex Jones’ show to set the record straight and provide some evidence that the shooting was real and that their children were victims?

But the real problem isn’t that the parents sued.  The real problem is that the justice system (more like injustice system) allowed the suit to go forward.  Then it turned into some kind of a kangaroo court.

Oh wait.  I don’t want the judge in the case to sue me for reputational damages.  I better not say that.

So let’s think about the kind of precedent this whole thing sets.

You better not challenge the official narrative of the 9/11 attacks.  The families of the victims might sue you and bankrupt you.

You better not question vaccine safety.  The workers at the pharmaceutical companies might sue you for defamation.

You better not criticize Joe Biden when he says that if you take the vaccine, you can’t die.  Biden might sue you for defaming his character.

Basically, you better accept every single government narrative as the official word.  If you don’t do this, then someone will feel hurt by it.  Someone can sue you.

Oh, and it doesn’t even matter if they are lying.  All that matters is that the establishment says that they aren’t lying and that you are lying for questioning it.

It doesn’t matter if you think Alex Jones is obnoxious.  It doesn’t matter if you think what he did was mean-spirited.  This isn’t what this is about.  This is about shutting people up.

If everyone is afraid of being sued for questioning a narrative, then the official narratives will get questioned a lot less.

So just shut up, obey your orders, do as you’re told, and you won’t get sued into bankruptcy through our “justice” system.

My son has been on a kick lately of watching Mr. Beast on YouTube, and I have caught my fair share of videos now.  Mr. Beast is a young guy who has about 100 million subscribers on YouTube.

As the money rolling in from his YouTube ad revenue has expanded, Mr. Beast has expanded the amount he spends on each video.  Sometimes he does challenges for people where he gives away insane amounts of money.

It has also been common for Mr. Beast to just randomly give money and expensive things away to people.  He bought all of the cars at a used car dealership and was practically giving them away when people came to shop for a car.  Mr. Beast and his friends also drove for Uber and gave cars away to their customers.

Some of the people get quite emotional.  Imagine getting an unexpected check for $10,000 or getting a free car when going to the car dealership.  There are many people struggling financially where this kind of thing makes a profound difference.

There was one video where one of Mr. Beast’s friends had a very minor car accident in a parking garage.  There was a minor scrape on one of the cars that was parked in there.  They waited all day until the owner of the car came out.  They told the guy what happened and said they felt bad.  They gave him $9,000 in cash on the spot.  The guy said his car isn’t even worth that amount.  He actually felt bad taking the money.  Maybe he won’t feel bad later on when he realizes that this is what Mr. Beast does.

Mr. Beast has also been known to go into stores and buy all of the merchandise in the entire store.  He has no problem spending $100,000 or more.  He’ll typically donate the items to a food bank or some kind of charity store afterwards.  While it might be aggravating for a customer who walks into the store afterwards and finds everything is gone, it does provide entertainment and most of the stuff is donated.

An economist might ask: Is this the most efficient way to help people?

My answer is, probably yes.  The reason it is efficient is because it is providing entertainment for tens of millions of people while also randomly helping people.  If Mr. Beast made videos where he interviewed people and reviewed their financial situation to see how deserving they are of money, it might get rather dull quickly.  And without the views on YouTube, there wouldn’t be money to give away.

There was one episode where Mr. Beast and his friends had a $100,000 bowl of ice cream.  He actually sort of apologized at the end of the video because he knows some people will say it is wasteful.  He said he makes some videos like this so he can keep his channel going strong and to bring in more money so that he can give away even more in the future.

He also talked about certain videos where he doesn’t run ads because some people will comment that he shouldn’t be running ads for certain content.  But he said that it kind of makes more sense to run ads because it enables him to be even more generous to other people.  Still, I guess he doesn’t want to hear it from his critics.

Mr. Beast is touching lives and making them better, but he is just one man with a team, and they can only do so much.

Think about the numbers.  If he gave away $330 million, that would be about one dollar for every American.  In other words, it would make no difference.  It also wouldn’t be very entertaining to watch people get surprised with a gift of one dollar.

When you watch people get surprised with a gift for $10,000 or $50,000 for winning a crazy competition, it means something.  It is emotional for the person getting the money because you know it makes a meaningful difference in the person’s life.  It is more entertaining to watch.

Good Money and Evil Money

When I was watching Mr. Beast, I thought about people with greater wealth than him who end up doing damage with their money.

If you have a businessman or entrepreneur who is getting rich by providing a demanded service in the open market place, then this is a sign of the person benefitting others.

Think about Jeff Bezos and the many tens of billions of dollars he is worth.  Most of his net worth is from his main enterprise, which is Amazon.  Amazon has made the lives of hundreds of millions of people better.  Most people I know shop at Amazon.  It is amazing that you can order something from your house and see it appear at your door a day or two later.  And it oftentimes is at just as good of a price as you would find going to a store (if you can find it all).

Amazon has also benefitted many small business owners who can sell their products online.  It also makes it easier that you can use Amazon’s services so that you do not have to individually ship your products.  You can send them all to the Amazon warehouse and they will take care of it for a fee.

And let’s not forget about authors.  Amazon started as an online bookstore.  It has enabled authors and would-be authors to have a platform to self-publish books.  In fact, Amazon can just print your book and deliver it whenever someone orders one.  The author doesn’t have to handle anything once the book is digitally uploaded.

I have no idea where Jeff Bezos stands politically, but I do know he gets his share of criticism.  I would much rather him spend his money on yachts than on buying failing newspapers that spread propaganda.  I would prefer it more if Bezos kept making Amazon better or making other businesses in the same model that benefit so many people.

Then there is someone like Bill Gates.  Almost everyone with a corporate job uses Microsoft.  There may be some arguments to be made that Gates got rich by using patent and copyright laws to his advantage.  I also have many issues with Microsoft and the Windows platform.  But I also have my share of praise for certain software like Excel and Word.

Of course, the main problem with Gates isn’t the money he has made from Microsoft.  The problem is that he uses that money for evil purposes.  He seems like a mad scientist.  He is a massive funder of the W.H.O., and we know he is a big pusher of vaccines.  He has also had some crazy plans for supposedly mitigating climate change.  Whether he is a crazy depopulationist trying to kill off a large portion of humankind or not, he is still using his money for evil purposes.

What if Bill Gates were just like Mr. Beast but on a bigger scale?  He could actually be helping people.  If I had a few billion dollars to give away, I’m pretty sure I could find more effective ways than giving it to a corrupt organization that supposedly is in the business of public health.  I can’t think of anything more against public health than the W.H.O.

Unfortunately, Warren Buffett fell into the trap of donating to the Gates Foundation.  I have no problem at all with giving money away, but the Gates Foundation pushes Gates’ crazy agenda.  They aren’t giving away free cars to people as far as I know.  I don’t even think they are providing food and drinking water to children in Africa.  Instead, they are trying to inject people all over the world.

Even if you think vaccines are great (they aren’t), it isn’t a lack of vaccines in Africa that make them unhealthy compared to the West.  It is the standard of living.  People in Africa need economic freedom.  From that, they will get a better standard of living, better sanitation, and less disease.  They don’t need more vaccines.

It’s important to realize that there are many wealthy people who do not have bad motives.  They do not want to depopulate the earth or to control the actions of others.  They may enjoy the power of having money as far as being free to do what they want, and that is fine as long as they aren’t doing harm to others.

Many people obtain great wealth and they don’t know what to do with it.  They may feel guilty because they became so wealthy, even if they did put in a lot of work to obtain it.  Sometimes it is the ones who feel guilty who do the most damage because they get involved in causes that the establishment tells them they should be part of.

For the wealthy people out there, whether you feel guilty or not, be more like Mr. Beast.  If you aren’t going to use your money to expand your business and benefit the human race in that capacity, then find ways to give it away without doing too much damage.

I already knew this before, but 2020 and beyond has made it more clear to me.  There are a lot of intelligent people who can sometimes be stupid.

I saw two adults today pushing a stroller outside.  The couple was presumably the parents of the child in the stroller, so they were on the younger side.  It was in the 90s outside and bright and sunny.  The two adults were wearing masks, and it isn’t allergy season.

They might as well have been wearing a shirt saying, “I am an idiot.”

Even if you “follow the science”, it is a rather elementary fact that you don’t have to worry about contracting a virus when outside in the hot sun.

We’ve seen the COVID hysteria since March 2020.  There are intelligent people who wouldn’t know logic if it smacked them on the head.  It doesn’t matter what you say to them or what evidence you show them.  They will just believe whatever Fauci tells them, or the CDC tells them, or CNN or NBC tells them.

I think that is where it is hard for people.  Because if you start disbelieving what these people tell you, then it opens the whole narrative up.  It means there is a concerted effort for these people to lie, or at the very least to not seek the truth.  It shatters your entire worldview.

I don’t understand how people are still believing in the so-called vaccines, let alone the vaccine mandates.  You’d have to be living under a rock not to see that these so-called vaccines are useless, at best.

Even if you ignore the tens of thousands of reported deaths to VAERS, and the hundreds of thousands of vaccine injuries (which are likely vastly understated), you are still left with supposed vaccines that don’t stop transmission or infection.  If anything, I feel like I know more people who are vaccinated who have tested positive for COVID, but maybe it’s just because they are more likely to get a test.

Whenever we see one of these rare breakthrough cases (ha ha), we always gets to hear the obligatory line.

“I have COVID, but luckily I’m vaccinated or it would have been much worse.”

This is a completely unprovable statement that has been spoken too many times to count over the last year.

It’s like in the wake of the 2008 financial crisis when the Federal Reserve created trillions of dollars out of thin air and the federal government spent trillions more in deficit spending.  We hear that if they hadn’t reacted like this, it would have been much worse.

Obedience and Intelligence

I was recently watching an old episode of Cash Cab.  It is a game show in New York City.  When people get into the cab, they say where they are going.  Then the party lights come on and they are told they are in the Cash Cab.  They have to answer trivia questions to win money on the way to their destination.

I don’t know how much editing was done for this show.  Maybe they had some people get into the cab and completely bomb on the questions and these episodes just never aired.  I really don’t know.

If it is just one person in the Cash Cab, it is usually pretty tough to win unless it happens to be a short drive.  If you get three or four people, the odds increase quite a bit.

Still, I am quite impressed by the knowledge of the man on the street.  Maybe it tends to be a better-educated class of people who ride in taxis in New York City.  The episodes I was watching were at least 10 years old.

New York City is considered very liberal (i.e., politically leftist).  I happen to have some friends who are still in New York, and they are on the conservative side.  But the majority, especially in or near the city, are on the left.

So the people I saw on Cash Cab were really very smart when it came to answering trivia questions.  And they aren’t just pop culture things.  It isn’t like watching Jay Leno do a man on the street interview where the people sound dumb.

My guess is that a majority of people on Cash Cab have a college education or higher, and they are also on the political left.  Again, this is just a generalization.  They are also quite smart at answering a wide range of questions.  Yet these are some of the same people who will wear a mask outside in the sunshine.  They will also dutifully get their vaccines and boosters and whatever else the CDC tells them to do.

I shop at both Publix (a grocery store) and Walmart.  The Publix clientele tends to be a little higher financial class even though the two stores are near each other.  I will find more people wearing a mask in Publix.

(For the record, I never once wore a mask at Walmart or Publix, and I was never questioned about it.)

So the people who have less formal education and who probably couldn’t tell you where Ukraine is on a map are the ones who are less obedient.

Why is this the case?

It is easier to train a smart dog.

I heard this from Dave Smith, who was quoting Michael Malice (who incidentally was once on Cash Cab).

I have an intelligent dog.  He doesn’t put anything in his mouth other than his own toys or his own food.  I can put hamburgers on the edge of the table (about eye level to him) and he won’t touch them.  He might get his nose close to sniff.

He doesn’t want to get in trouble.  He doesn’t like being yelled at.  He rarely gets in trouble any more because he doesn’t do any of the things that have gotten him in trouble before.  He is very intelligent.  He is very obedient.

It is good for a dog.  It is a bit more dangerous for human beings.

The problem is that they are being too trusting.  They don’t want to show skepticism.  They lack a certain curiosity.  And if they did realize that they were being lied to, they probably wouldn’t have the courage to stand up.

I think some people want to be seen as sophisticated.  They want approval from others.  They want to fit in with their peers of intelligent people.

Of course, they are not intelligent when it comes to dealing with certain logic.  They can’t see with their own eyes that the vaccines don’t work.  They can’t figure out that locking down society has greater harms than the virus they so irrationally fear.

Again, it would shake their entire worldview.  It would mean that just about everything NBC Nightly News has told them is a lie (or at least not the full story).

This is all generalizing, of course.  We know dumb people who are obedient to the virus hysteria.  And we know very intelligent people who do not buy into all of the virus hysteria.

The otherwise intelligent people who have bought into the hysteria from day one and continue to accept the establishment narrative are sensitive to their reputations.  This is why ridicule is an effective means of getting at them.

I am not saying to ridicule your relative on Facebook.  But you can certainly ridicule Biden and Fauci and the other lying liars who are in positions of power.

The more these people are ridiculed and mocked, the more it wears at the otherwise intelligent people who don’t want to be seen as unsophisticated.  They have already gotten worn down to a degree.  They need to feel like a tiny minority if they continue to hold their irrational and immoral views regarding COVID and vaccines.

The latest FOMC statement came out on July 27, 2022.  As expected, the Federal Reserve is hiking its target federal funds rate by 75 basis points.  It now sits in the range of 2.25% to 2.5%.  It was a unanimous decision by the members.

Let’s say you had isolated each FOMC member since the previous meeting and prohibited them from seeing market expectations of the next rate change.  They were given all of the inflation and other economic data, but couldn’t listen to what the financial analysts were predicting for the next FOMC meeting.  What are the chances that they would have all agreed on a 75 basis point rate hike without talking to anyone about it first?

We have now seen back-to-back meetings of a 75 basis point rate hike.  So the Fed is getting aggressive in fighting the inflation that it created.  But short-term rates are still just above 2% while consumer price inflation stands above 9%. Enjoy that negative 7% return on your money.

In the Implementation Note, it states that the balance sheet will be reduced as previously planned by $47.5 billion per month.  In September, it will increase to $95 billion per month if the plan doesn’t change.

This may seem like a lot, but it is more like a blip when compared to the $5 trillion that has been added over the last 2 and a half years to the balance sheet.

You can also see in the Implementation Note that the Fed directs the payment of 2.4% interest to commercial banks on their reserves.  Since 2008, this is how the Fed has controlled its target federal funds rate.  Paying interest on reserves essentially sets a floor for the federal funds rate.

Because of this, another thing has changed since 2008.  The Fed doesn’t necessarily have to drain its balance sheet in order to raise its target rate, and it doesn’t need to raise its target rate to drain the balance sheet.  The two things still go hand-in-hand, but they aren’t as connected as they once were.

Paying interest on bank reserves may be a rip-off for us.  It may be a subsidy to the banks.  It may increase the deficit higher than it would have been otherwise.  But it does make it possible for the Fed to “raise rates” while not necessarily engaging in monetary deflation.

Still, even if the balance sheet remained the same, there will still eventually be a recession.  If you read Mises or anything about the Austrian Business Cycle Theory, it becomes apparent that just a slowdown in monetary inflation will eventually lead to a correction of the previous malinvestment.

Before the FOMC statement was released, there was approximately a 30 basis point difference between the 2-year yield and the 10-year yield.  The 2-year yield is higher, which doesn’t make much sense unless the bond investors are expecting a major downturn.

The gap between the 3-month yield and the 10-year yield has narrowed significantly over the last several weeks, and I expect an inversion there within a short period of time.

Jerome Powell said that he doesn’t think we are in a recession.  He also said it isn’t up to him to define when we are in a recession.  And he is probably technically correct on both points, even though we are getting the second straight quarter of negative GDP.

Powell is hoping for a “soft landing”.  He doesn’t want to admit that we are likely to have a recession.  I don’t think he’s a total idiot.  I think he knows that the Fed is in a bind.

Whether or not we are technically in a recession right now is actually not that relevant because this isn’t the big one.  The Fed would be happy if this were deemed a mild recession and that’s the end of it.

If we hit a major recession and stocks crash, what will the Fed do?  I’m really not sure, and I don’t think Jerome Powell is sure either.  They will try to continue to walk a tightrope, but the rope is getting thinner.

If consumer price inflation is still raging at 9% and we hit a big recession, it is going to be tough for the Fed to start lowering rates and printing money again.

Stocks have had a rough year so far, but I believe this is only the beginning.  The bond market and the gold market are telling us that we should be more worried about a major recession than higher price inflation in the future.  It’s not to say that the gold market and bond market have to be right, but I have more trust in the prediction ability of these two markets as compared to the stock market.

There are leaders, and there are followers.  There are also those who like to jump in front of a marching parade, realizing which way the crowd is going.

There were many COVID hysterics back in 2020.  In fact, it was a significant majority of Americans.  There were different degrees of hysterics, just as there are now.

Some people were very fearful because that’s what the media and the so-called experts told them to be.  There were some who might have been a little skeptical, but went along with all of the hysteria anyway.

There were some people who were skeptical, but they didn’t dare to speak up and speak out against the hysteria.  They didn’t want to be seen as uncaring.  They didn’t want to be called a grandma killer.

There were a few of us who did speak up from day one, or at least from early on.  Even if you have little knowledge of viruses and medicine in general, it shouldn’t be hard to be highly skeptical of what the establishment media and politicians are saying.

And for libertarians, it should have been easy to see in March 2020 that what was happening was wrong.  It doesn’t take any extensive study in the Non-Aggression Principle (NAP) to see that it is immoral, unlawful, and wrong to order people to stay at home and to shut down “non-essential” businesses.

Should We Forgive?

If you know (or know of) a person who was a COVID hysteric in 2020 and has now dramatically shifted their viewpoint, what is the proper response?

Should you:

1. Just pretend like the person was never a COVID hysteric and give them a pass?
2. Rub it in their face that they were so wrong a couple of years ago?

Perhaps there is a third option, which may be best for dealing with the average person.  You don’t rub it in this person’s face unless they were particularly obnoxious towards you back in the day of the hysterics.  You also don’t forget how the person bought into all of the lies.  You can somewhat give them a pass and let them join our side, but don’t seek their advice or leadership in the future on anything of importance.  They will just blow with the wind.

There is also some nuance to this whole thing.  I know (and know of) many people who were bad on COVID at the very start, including some libertarians.  Some got their head straight within a couple of months before it had become more acceptable to question the COVID “experts”.  As long as they weren’t too blatantly obnoxious during the first few months, it is easy to forgive them and move on.

If someone said in late March that they were not in favor of lockdowns but that they were isolating from others in order to do more research, then it is hard to come down on such a person.  It is a matter of humility.

In the case of politicians, I remind people that Ron DeSantis, the governor of Florida, did issue lockdown orders at the beginning of April 2020.  People were told to stay at home unless they were doing something deemed essential.  I emailed his office, and I was referring to him as Dictator DeSantis.

Little did I know that he would become one of the courageous people to take a stand against COVID hysteria.  The reason I am somewhat forgiving of DeSantis is that he took a stand before any other major politician had done so.  South Dakota was the only state that didn’t issue some kind of statewide lockdown or stay-at-home order.

Florida is a major state.  DeSantis took a major stand in the summer of 2020.  All statewide restrictions were lifted by September 2020.  Although DeSantis made a major mistake early on, I am willing to forgive it because he took a courageous stand against the establishment when almost nobody else was doing so.  For that reason, I will likely vote for him in the November election for governor.

I do not have a high opinion of Greg Abbott in Texas.  He shifted with the wind.  He only freed up Texans when it became popular (within conservative circles) to do so.  He was not courageous.  It is better to have someone like him than some leftist who maintained restrictions for a lot longer, but we have to remember how these people acted when it counted.

I was also reminded of this recently when I watched a recent video of Jesse Watters of Fox News interviewing Dr. Marty Makary, who is a regular on Fox News.  If you listen to them now, they sound rather reasonable when discussing COVID and vaccines.

But I won’t forget that Makary was a shill for the vaccines last year.  He wasn’t questioning their safety or their efficacy.  He was repeating the CDC talking points except he would deviate a little when he talked about natural immunity.  He didn’t sound like Fauci, but he wasn’t great on COVID, masks, and vaccines in 2020 and 2021.  And this is when it really mattered, as vaccine mandates (some of which are still in place) were being imposed.

I also won’t forget Jesse Watters.  I barely ever watch his show, but I remember seeing a segment in 2020.  He was interviewing a couple of young women who had been on spring break.  Watters was lecturing the young women for partying it up with their friends because they were being irresponsible and could bring the virus home to their parents and grandparents.  Watters was so smug and condescending.  He was wrong too.

In other words, both of these people were helping to spread the COVID hysteria, along with shilling for the vaccines.  Now they are taking on a different tune.  They are not leaders.  They are not courageous.  In fact, by writing this, I am rubbing it in their faces a little bit that they were cowards when it counted.  I won’t ever seek their advice or take seriously anything they have to say in the future.

There were some people who got it right from the very beginning.  Why not listen to those people?  Ron Paul got it right from the start.  He never bought into COVID hysteria.  In March and April 2020, he was saying that kids should be outside playing football.  As with many things, the world should have listened to Ron Paul.

In 2019, the yield curve inverted.  The 3-month Treasury yield exceeded the 10-year yield.  An inverted yield curve points to a recession ahead, typically 6 months to a year in to the future.

We got a recession in 2020 after the inverted yield curve – sort of.  It was a strange situation.  It wasn’t strange just in the fact that the world shut down over a virus.  It was strange economically.

In March 2020 when coronavirus hysteria set it, the Federal Reserve immediately started massively inflating.  It was already in full gear when most of the world shut down.

Just look at this from an economic perspective and how different this central bank business cycle played out.

When there is a recession, the Fed usually takes dramatic action after the recession has begun and is evident.  There was already major trouble brewing in 2008.  In fact, it is now said that the actual recession started in late 2007.  Yet, the financial crisis didn’t become evident until September 2008.  The Fed started creating massive amounts of money and lowering interest rates to near zero after the economy was already in a deep recession.

In March 2020, we didn’t see major signs of a recession at the present time.  We had an inverted yield curve in 2019, and the repo market blew up in 2019.  So the Fed was already starting to go back to an easy money policy.  But if you looked at the headlines on CNBC, there was no indication of recession at the beginning of March 2020.

So the Fed started inflating like crazy before a recession had fully come on, or at least before it was evident.  This, in itself, was somewhat unique.  The Fed usually reacts after we are already in a recession.  On top of this, the Fed’s reaction was dramatic.  The only thing comparable in modern times is the 2008 financial crisis, when the Fed also dramatically increased its balance sheet in a short period of time.

Because of coronavirus hysteria and the lockdowns, the fall in economic activity in March and April 2020 was not blamed on previous Fed policy.  It was blamed on a virus.  The smarter people blamed government policy (hysteria and lockdowns) instead of directly blaming a virus.

There is no question that closing down “non-essential” services had a major economic impact, but there is a feeling that the Fed was let off the hook.  We probably would have seen a recession in 2020 anyway.

Not only did the Fed have something to blame, but the people at the Fed also had an excuse to dramatically inflate, thus getting ahead of the recession.  There is no question that the Fed’s actions made the recession short and mild, at least on paper.  There is still a question of whether we actually had a recession in 2020 at all.

The stock market went down in March and part of April and then just absolutely boomed for the next year and a half.

The problem, of course, is that the Fed didn’t allow a correction to take place and set us up for an even bigger disaster, which we face today.

The Fed’s massive monetary inflation has finally caught up with us.  The Fed got away with massively inflating in 2008/ 2009 up until 2014.  Although there was a massive misallocation of resources happening, we never got significant consumer price inflation.

Things are different now.  The Fed is faced with price inflation of over 9%.  That is why the Fed has essentially been forced to tighten.  As the Fed slowly deflates its balance sheet and raises its target rate to fight the price inflation it created, the bubble is going to pop.

As I write this, the Treasury charts show the 2-year yield is well above the 10-year yield.  There is about a 20 basis point difference (0.2%).

The 10-year yield has stopped rising and has actually been falling lately.  Meanwhile, the 3-month yield is rising, and it will likely continue to rise as the Fed is forced to raise short-term interest rates.

The 6-month yield already exceeds the 10-year yield.  I believe it won’t be long before we see an inversion of the 3-month yield and the 10-year yield.

There is going to be a major recession later this year or in 2023.

I don’t think the Fed can do what it did in March 2020.  Even if we get another virus, or another variant, or some other event, it will be difficult for the Fed to massively inflate like it did in 2020, and even 2008.

If the Fed reversed course and massively inflated from here, then the CPI number would take off.  We would be facing massive double-digit price inflation that could beat out the 1970s.

As bad as the Fed officials are, I don’t think they want to risk hyperinflation and losing the U.S. dollar.  They would be jeopardizing their own power.

If there is monetary inflation, it will have to be more targeted.  Maybe they’ll bail out a few of their friends, but it won’t be on a massive scale as we have seen in the past.  I don’t think we are going to see trillions of dollars in bailouts and stimulus payments.  If I’m wrong on this, then you really better be prepared for tough times ahead.

The damage has already been done by past monetary inflation and artificially low interest rates.  It is just a question of how we deal with the damage now.

It is better to take some pain now in the form of a recession and popping of the Everything Bubble.  That is the least bad option.  It would be far worse if the Fed returns to monetary inflation and risks some form of hyperinflation.  Even a world with 25% annual price inflation is scary.

As of right now, it is best to prepare for a hard and deep recession ahead, knowing that the Fed does not have as much room to step in and “save” the economy from a recession.

I have to play a part in helping to remind everyone that there are still widespread vaccine mandates being imposed by the government.  Aside from mandates on government workers, including the military, there is still a ban on foreign nationals entering the United States who are not “vaccinated”.

There are many situations where a husband and wife live in, let’s say, Europe.  One is an American, and the other is some other nationality.  The American is able to travel to and from the United States.  The non-American spouse is unable to travel without being fully “vaccinated” for COVID.

It also means that non-vaccinated athletes who wish to compete in competitions in the United States are unable to do so at this time.

Novak Djokovic, one of the greatest tennis players of all time, will be unable to play at the upcoming U.S. Open if the rules don’t change.

This is one year after the CDC admitted that the vaccines neither prevent infection nor transmission.

In other words, the vaccines do absolutely nothing to stop the virus from spreading around society.  If anything, they are making it worse.  What kind of a vaccine would make no difference, at best, in stopping the spread of whatever it is intended to prevent?

And yet, this is the vaccine that has been pushed relentlessly with mandates that have cost hundreds of thousands of people (or millions) their jobs?

The best the vaccine pushers can say now is that getting the vaccine will make it less likely that you will get extremely ill.  I don’t even believe that.  That is the reason that they won’t show us any actual and real data.  We have no idea what percent of hospitalizations or deaths are in the vaccinated versus the non-vaccinated.

The last time they told us that number was about a year ago in 2021.  That is when they (the powers-that-be) were untruthful and said that something like 98% of hospitalizations were the “unvaccinated”.  Do you remember that this was supposed to be a pandemic of the unvaccinated?

But that statistic was fraudulent from the beginning.  They were counting the hospitalizations going back to January 2021 when they were at the worst point and almost nobody was vaccinated at that time.

Now we just don’t get any data on this, and I think we all know why.

Of course, there is also no consideration given to all-cause mortality, which is really what matters.  If the vaccine saves you from COVID but kills you because it causes some other problem in your body, then this should be known.

The Pfizer trials (see page 23) showed that more vaccinated people died than those in the placebo group.  This should have been the end of the story.  I can’t imagine what an honest Pfizer trial would have shown.

As a libertarian, I don’t think the FDA has the right to deny anyone a drug, vaccine, or treatment that they seek.  So I am not advocating that nobody should have been permitted to get a vaccine.  But the FDA should not have been recommending it, let alone actually trying to mandate it.

I heard Joe Biden say several times in 2021 that if you get vaccinated, then you can’t die.  You won’t get sick.

Biden is a liar, and his speechwriter is a liar.  First, to accurately convey what he meant, he should have said that if you get vaccinated, then you can’t die of COVID.  He just said that you can’t die.  I guess he wanted everyone to believe that they became immortal if they took the COVID vaccine.

Words matter.  But even if we give him the benefit of the doubt (there’s no reason to) and assume he meant that you can’t die of COVID if you get vaccinated, he is still a liar.  Anyone living in the real world can see this obviously isn’t true.

Anyway, even if you think that the vaccines are helpful at this point in preventing serious illness, the vaccine mandates still make no logical sense other than these people being evil.  The vaccines clearly do nothing to stop transmission or infection, so there is no more reason to mandate vaccines than there is to mandate eating vegetables.

I believe Kyrie Irving, a basketball player for the Brooklyn Nets, was important in pointing out the vaccine mandate absurdity in New York City, especially when he showed up at a game as a spectator but was prevented from playing.

Now we have a star tennis player who would like to play in a major tournament in the United States but is unable to do so because he won’t get jabbed.  There is some pressure building on this absurd policy, but I believe more people need to become aware of it.  I’m hoping Djokovic will bring everyone’s attention to the fact that these immoral mandates are still in place in the “land of the free”.

The June 2022 CPI numbers are in.  As it has become a trend, the numbers came in hotter than expected.  The year-over-year CPI now stands at 9.1%.

I can’t emphasize enough that this is bad news for investors.  Or to be clearer, it is bad for investors holding assets like stocks, real estate, and commodities.  If you are short stocks, it may not be bad news.

The price inflation itself represents pain for consumers.  Since we are all consumers, nearly everyone feels some of the pain.  I don’t think Jeff Bezos is bothered much by the rising prices, at least as a consumer.

This means that the Federal Reserve will have to continue to aggressively tighten.  The Fed’s balance sheet will likely go down, but very slowly.  Of course, that is the main part of the problem.

On interest rates, the Fed will be forced to continue tightening.  There is talk now of even a 100 basis point hike in its target rate at the next meeting.  It is likely there will be at least a 75 basis point hike.

This means that short-term yields will rise.  If longer-term yields stay about the same, then we will see a major flattening of the yield curve.  The 2-year yield has already been higher than the 10-year yield the last several days.  Now we are going to see the shorter-term yields such as the 3-month yield approach the 10-year yield.

This has recession written all over it.  Some people think we may already be in a mild recession right now.  That is quite possible, and it just may depend on your definition.  Maybe we will have two consecutive quarters of negative GDP.

The American middle class is already in a recession no matter what.  They are faced with 9% price inflation, and most Americans aren’t getting an annual raise of 9%.

Even if we are in an official recession right now, it doesn’t mean we can look forward to a recovery in the near future.  There are massive misallocations caused by many years of reckless government spending and money creation from the Fed.

It doesn’t start with COVID either.  This goes back to at least 2008 when the Fed started massively expanding its balance sheet.  There was only a brief period (approximately 2015 to 2019) of the last 14 years when the Fed wasn’t inflating.  Ironically, the Janet Yellen era (when she was chair of the Fed) was probably the least bad.

So here we are, probably near the peak of the Everything Bubble.  Stocks probably already peaked many months ago.  Real estate might be right near its peak in most places, although I can’t be certain that mortgage rates will continue to go higher.

Bonds have a lot of contradictory forces working.  The high price inflation indicates that yields should go higher to compensate investors.  But the yields are way below where the price inflation numbers are.  It might just mean that investors are taking what little yield they can get, even if it is negative in inflation-adjusted terms.

You may be better off taking a negative 6 percent “return” in the bond market in real terms rather than risking a 30 percent loss in stocks.

Even with the high inflation numbers, long-term bonds could still ultimately go down from here.  U.S. government bonds are seen as the ultimate safety.  If we are going into recession, long-term yields could fall even with the high inflation rate.

And then there are commodities.  The price of oil has come down from its peak, and there has been a little bit of relief at the gas pump.  Just as with bonds, there are forces working for and against higher oil prices.  A deep recession should certainly soften demand for energy.

Gold – and worse, mining stocks – have been crushed lately.  One would think that gold would be soaring to new highs with the crazy price inflation rates.  Unfortunately, there have been some forces working against it such as a supposedly big discovery of gold in Uganda.

Gold just hasn’t been part of the Everything Bubble.  I guess that makes it the “Most Everything Bubble”.  The mania has been nearly everywhere but precious metals.  Speculators wanted the big action in the crypto market.  They have gotten some big action lately, but probably not in the way they wanted.

Also, with gold, the dollar has been relatively strong against other major currencies.  The euro just hit parity with the U.S. dollar.  That says more about how bad the euro is than how good the dollar is.

Anyway, I will have more analysis in future posts about the euro and gold.

The gold market and the bond market are telling us that we should expect a severe recession.  There doesn’t seem to be great fear about high price inflation years into the future.  The market is taking the word of Jerome Powell that the Fed will continue to tighten.

It is already a tough economic environment out there, and it is only going to get tougher.